Demand Generation: Marketing and Sales Collaboration
Author: Abhay Reddy.
Demand generation is no longer just about MQL (Marketing Qualified Leads) or pipeline/opportunity creation. It is essential to get all the way to revenue or closed-won — this is especially true given the long lead times involved in B2B transactions. Continued focus on buyer intent, additional nurture and sales collaboration has become imperative. An integrated approach with reproducible and aligned activities across teams such as marketing, BDR/SDR, sales and customer teams are required to meet a company’s revenue objective
Internal alignment between marketing and sales plays a pivotal role in demand generation. Demand generation is no longer about creating demand for sales to follow through on. The lines between the two organizations continue to blur for revenue generation. 42% of marketers consider the internal alignment between marketing and sales as the key to achieving demand generation objectives. [2022 Demand Gen Report].
Service Level Agreement (SLA) between marketing and sales is one of the mechanisms that allows them to get aligned on the objectives, definitions, quality metrics and responsibilities. It also helps create a predictable model for analysis and forecasting. It brings clarity to the roles and responsibilities, what to expect, and formulates an escalation hierarchy.
It is also important to think and plan ahead: Demand generation is a long game, and very dependent on the lead times from initial lead generation to opportunity creation to eventual close. It is also dependent on the complexity of the product, number of approvers, and type of industry. ex: a consumable or product <$5k can have a short lead time to close, but larger products and services that run into $100K-$1M average between 100 and 300 days to close. Demand generation in such cases results in a progressive revenue creation (ex: 1% pipeline realized in the current quarter, followed by 5% in the next and so on and so forth). Plan on creating a large enough pipeline that helps achieve revenue targets many quarters away. Running marketing campaigns and expecting immediate results without factoring in the lead times and close rate will affect the overall performance of the demand engine.
Another mechanism to explore is e-commerce. Sales has aggressive quotas each quarter and it is only natural for them to focus on selling high order value products and solutions. They also prefer engaging with known accounts and customers. This leaves a gap with new logo/smaller companies, folks who want to evaluate the product, and lower value order products. Shift in customer behavior: COVID-19 has significantly shifted the buyer’s journey away from an in-person type sale to one that is pre-dominantly self-service oriented. Customers now prefer to research, explore, and purchase on their own terms. As of 2022, 55% of tech sector companies offer self-service via free trials, and only 19% of customer groups preferred to speak to a vendor’s representative [2021 Demand Gen Report]. E-commerce will play a crucial role in B2B automation, reducing lead times and allowing customers to self-actualize. Almost 80% of B2B decision-makers preferred remote human interactions [2020 McKinsey]. Self-Actualization helps sales by create an overflow for non-standard requests (generally higher value) and frees up their time for pursuing whales and other high value deals.
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